Problem - Acme Company uses the weighted-average method in to estimate product costs, and reports the following costs for last month for the first department of a three stage production process:
Beginning work in process:
Units 400
Material cost $3,100
Conversion costs $3,900
Percentage of completion as to materials 55%
Percentage of completion as to conversion costs 25%
Units started 7,200
Units transferred to the next department 6,600
Material cost added $ 85,800
Conversion costs added $ 248,200
Ending work in process:
Units 1,000
Percentage complete as to materials 85%
Percentage complete as to conversion costs 70%
a) What is the cost of the ending work in process of the department?
b) What is the cost of the units transferred to the next department?
c) Identify the type of product costing system used by Acme, and an alternative method, and state define and distinguish the two methods.
d) What does Acme's choice of costing system tell you about the product Acme makes and sells?
Note: To reduce rounding error, please carry out all intermediate computations to at least four decimal places.